(Bloomberg) -- Elon Musk is ramping up his attacks on British Prime Minister Keir Starmer and his new Labour government at the same time as the UK emerges as the largest market in Europe for Tesla Inc. vehicles.
UK sales of the electric-car brand’s models rose 1.5% to 50,334 in 2024, figures published this week by the Society of Motor Manufacturers and Traders showed. That moved the country above Germany, where Tesla sales slumped 41% last year after the removal of EV subsidies in late 2023 hurt demand.
Britain has emerged as one of the few bright spots for Tesla in the region — its Model Y and Model 3 were the top-selling cars in the UK in December. Yet that also points to the disconnect between Musk’s criticism of Starmer, and the center left government’s enthusiasm for electric cars and clean technology more broadly that should be an opportunity for the billionaire’s companies.
But one look at Musk’s X account suggests the social media platform’s owner doesn’t see things that way when it comes to the UK and its politics. What began soon after Starmer’s general election win last July with criticism of the new government’s crackdown on far-right rioters has escalated into a constant stream of vitriol — to the dismay of parties across the political spectrum.
Musk — who is set to hold an influential position in US President-elect Donald Trump’s administration — has latched onto far-right causes in the UK including calling for the release of activist Tommy Robinson from jail. He’s also said Starmer should be in prison himself over his role as director of public prosecutions before entering politics, accusing him of being “complicit” in an historic child abuse scandal in British towns.
The attacks have thrown the spotlight on Musk’s business interests in the UK, and whether his views might put off some consumers — or the government.
Starmer hit back at Musk on Monday, saying a “line has been crossed” after one of his ministers received threats in the wake of his online salvo. “I enjoy the cut and thrust of politics — the robust debate that we must have — but that’s got to be based on fact and truth, not on lies,” he said.
Clean Tech
Selling cars isn’t Musk’s only business in the UK. Tesla is also one of Britain’s largest providers of residential power-packs, which can store electricity from solar panels and provide a backup during outages. Eco-conscious homeowners can sign up to make their houses more efficient and lower energy costs. Tesla is also a major supplier of grid batteries in the UK.
Starlink, the satellite broadband service of Musk’s company SpaceX, has been operational in Britain since 2021 and offers homes internet access starting at £75 ($94) a month, though it’s not available everywhere. Like rival services, Starlink’s constellation of small satellites orbits the earth and aims to connect more remote areas to the internet.
Musk is also ramping up his artificial intelligence activity in the UK. His xAI Corp. last month incorporated a UK subsidiary with Jared Birchall, one of his top deputies, as the sole director.
According to LinkedIn profiles, there are a few xAI engineers based in London, home to Google DeepMind and a growing OpenAI outpost. The division is also advertising UK openings on the jobs site.
Government Deals
Tesla also has a number of UK government contracts. These include a recently awarded deal worth close to £1 million to deliver vehicles for the National Highways agency’s traffic officers.
X, formerly known as Twitter, continues to have a UK presence, with the British subsidiary marketing and selling advertising for the platform.
But the UK arm has been slimmed down since Musk’s takeover in 2022 and subsequent cost-cutting. It recorded severance costs of around £16.7 million in 2022 when it had an average of nearly 400 staff, according to accounts filed at UK registry Companies House. They also show revenue that year of £205.3 million. X’s latest UK accounts covering 2023 are overdue.
And while Tesla sells more cars in the UK, the company has invested more heavily in Germany, where it has an EV factory.
The complex dynamic between Musk’s UK business interests and political interventions was on full display last year when the government didn’t invite him to an investment summit — a snub in response to Musk’s criticism of Labour and Starmer that set off yet another war of words.
“I don’t think anyone should go to the UK,” Musk said in an X post at the time.
--With assistance from Stefan Nicola, Albertina Torsoli and Mark Bergen.
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